Category: Subordinates

Anyone Can Be in Accounting?


There were times not long ago when in order to "work in Accounting"  you had to have some formal knowledge of, at the very least, bookkeeping principles.  When one dealt with manual cash receipts and disbursements journals, subsidiary and general ledgers, payroll transaction recording, at minimum she or he had to understand the principles of double-bookkeeping. 

The technological advancements and computerization changed all that.  Now, anyone who knows some Excel, quick enough to grasp menu-driven applications and doesn't suck at basic math is good enough to work in Accounting.

Don't get me wrong, I am a technology freak.  Some people who know me long enough say that Technology is my middle name.  Moreover, we, accountants, were some of the early beneficiaries of the computer coding: the first business data analysis compiler was written in 1957.  Truth be told handling all those books manually was getting out of control.

However, hiding all the double entries behind the computer's screen, allowed for the situation we currently have, especially in small business environment: people without any accounting and/or finance foundation are allowed to mechanically perform important functions. 

Here is a true story shared with me by one of my correspondent.  Let's call her Lisa.  When she took a CFO position in a law firm that employed over 500 people, the composition of her "Accounting & Finance" department was as follows: AP Manager (no accounting degree, 20 years of strictly AP experience), PR Manager (BS in General Business, prior experience in HR & Benefits), Staff Accountant 1 (BA in Psychology who was a daughter of a partner's friend), Staff Accountant 2 (BA in Child Psychology who started as a part-time office clerk when she was in HS and just stayed on), Financial Analyst (BS in Business Administration with above average Excel). 

Is it surprising that the firm had a turnover of Controllers and CFOs at the rate of 4 per year in the past few years?  They had great ideas what the company's record-keeping, analytical and reporting functions should be, but no one to whom to delegate the actual implementation.  Is it surprising that the company never had audited financial statements?

At the first meeting with the Staff Accountant 2 (let's call her Sam), Lisa was told that Sam was "an accounting genius."  Sam said, that she was so good at it, she got everything in a split second.  A week later Lisa has discovered that all Bank Accounts in the Asset section of GL had reversed entries: receipts as credits and disbursements as debits.  In other words, it replicated the bank statements instead of reflecting the company's transactions.

You think this law firm's accounting staff is unique?  Nope, it happens everywhere.  Look at the people responsible for financial functions in this young and hip company Quirky.  I am sure these four women are bright and wonderful, but none of them have neither accounting nor serious financial background. 

If this problem has affected you as well, please, do not hesitate to email me and share.

The Importance of Prioritization for CFOs & Controllers


My very first post CFO's and Controllers' Many Hats  addressed (in two parts, as the matter of fact) the inescapable issue of overwhelming span of functional control tackled by all financial execs.  The issue has been described as a major source of both frustration and pride.

Well, whether you are proud or not of being a natural choice for a million of high-level responsibilities, keeping all balls in the air is a managerial skill mandatory not only for your professional success, but for taming the frustration as well. 

Both mathematical rules of optimization and circus performances teach us that there is a limit to the number of items you can juggle at the same time without dropping them.  This is why Prioritization and Delegation are two most important organizational tools for a Controller or CFO. 

Let me share with you my own Top Three Rules for each of these tools.

Prioritization:

Rule #1.  Assign priority scores to each task.  Let's say, 1 to 10 with one being the lowest.  The highest priority on your list should always be given to the task that in a long run will benefit the bottom line the most.  For example, writing an angry answer to your boss's email asking whether you are busy right now has lower priority (I would say, 2) than looking at your cash position and deciding whether you need to use your credit line or cash availability to finance today's operational expenses (definitely a 10).

Rule #2.  As much as you can, try to block certain time periods with periodic tasks of high priority in advance.  There are such things as SEC reports, monthly budgets, weekly cash flow projections, etc. etc. that occur periodically.  Prevent yourself from cramming at the last moment by assigning priority scores and scheduling these tasks ahead of time.

Rule #3.  If you work in a privately held business (and most small and mid-size companies are) and report directly to the Owner/President/CEO, be ready to push his/hers priority higher up on your list.  I know it sounds almost psychotic, but being flexible when it comes to your boss's requests sometimes can save you the boatload of frustration.  However,  it does not mean that you have to drop everything and attend to his needs.  Many people make that mistake.  Instead, you need to provide him with reasonable time frame and explain why the task at hand is more important for HIS BUSINESS.  I will get back to the issue of flexibility in scheduling discussion.

Delegation:

 Rule #1.  Don't be afraid to delegate important functions to capable subordinates because you are afraid that they will undercut you.  First of all, if you are a good match for your position and do your job to the best of your abilities,  you should be confident.  Secondly, by overwhelming yourself with extra tasks you diminish your own efficiency and undermine yourself.

Rule #2.  NEVER do your subordinate's job because you believe that you can do it faster and better.  This is a bad mistake many of us make.  When we do that, we damage ourselves in two ways: by wasting our own valuable time and by not letting our subordinates to improve and develop.

Rule #3.  Always make time for training and advancement of your subordinates.  By building strong and reliable accounting/finance staff you better your own chances for success .  

Honestly, it took me a while to develop and even longer to start implementing these rules, but I can vouch for their effectiveness. 




CFO (or Controller) Puts on Her Recruitment Hat


It is difficult to look for a job – I already talked about it several times and even have a "Job Search" category to keep the related posts in one place.  Every time I encounter information that may help job-hunting CFOs and Controllers, I make sure that it finds its way into this blog.

But what about my peers and myself who are in an active headhunter mode?  Truth: we dislike looking for people nearly as much as job-searching.  I guess, being a seeker is not as enjoyable to us as it is to Harry Potter.  

Pitching yourself to prospective employers and recruiters is nerve-straining.  Dealing with unfairness, randomness and subjectivity is frustrating.  Facing rejection is disheartening.  That's all true.  However, after each attempt you collect yourself, you move on.  

On the other hand, recruiting people who will work for you, who will carry out functions you delegate to them, but for which you are ultimately responsible, is not just an excruciatingly difficult and tedious work.  When that stage is over, you are not done -  this is just the start.  Now you have to ease the new hire into his functions, fill him with missing knowledge, perfect his ability to perform the tasks, i.e. develop your new staff member into an asset. 

Here is what frequently happens.  After spending your preciously scarce time looking through hundreds of resumes, interviewing candidates by the score, all you want is to get this damned recruitment issue off your agenda.  If you cave in and make a mistake of hiring a wrong person simply because you are tired of the process,  you will still go through the remaining steps without a chance of achieving the desirable result.   So, all that time will be completely wasted.  Moreover, it is damaging to the company, to your own success, to your staff's morale.  It leads to enormous amounts of the worst type of frustration – the one that's based on guilt.

Why do we end up falling into this trap?  If you are not a giant corporation that can afford to fill departments with bodies and let the most ambitious and talented ones to surface, every person you hire needs to be the best you can find.  And of course, you are somewhat handicapped by the fact that you are not a household name. 

Still, it is shocking really how difficult it is to find good candidates considering how many people are out there unemployed.  On one hand, it is a buyer's market, on the other hand, the shelves are stocked with generic products who are limited, unfocused, and dull. 

And I am actually very flexible.  I don't hold industry-specific experience in much regard.  I believe that it depends on a person, and not the school,  whether he is well educated or not.  What I am looking for is that spark in the eyes showing intelligence; the ability of systematic thinking; the foundation I can build on.  And that's hard to come by.